Employee Ownership Foundation

Charting Your Own Future

"We understand that a well managed employee-owned company is not a destination, it is a journey..."

- J. Michael Keeling,
President of The ESOP Association


Approved Budget and Projects 2017

Discussion item: EOF 2017 approved budget and projects
At the November 2016 Executive Committee Meeting of The Employee Ownership Foundation the 2017 EOF budget was accepted as well as the 2017 projects. The Executive Committee (“EC”) of the EOF is comprised of many of the same members of The ESOP Association (“TEA”)’s Board of Directors (“BOD”) also present at that meeting. Behind this tab are the following documents relating to the 2017 approved EOF budget and projects:

1. 2017 EOF budget and
2. Attachments relating to the synopsis below.

This budget provides payment of $50K to TEA for EOF expenses paid by TEA.

The 2017 budget is a deficit because of proposed spending increases. EOF, however, as of the day of this document has $287,305 in its bank account, $477,710 in a money market account, and $2.26M in investments. Thus, EOF has more money since its inception. Thus, EOF can fund all proposed projects and still be over its goal of always having $1 million liquid assets on hand.

As with regard to the $1 million goal, it could easily be raised to $1.5 million, even with the increase in operations spending, while having a goal that in the bank account always has $100K on hand.

EOF’s total assets as of December 31, 2016 are $2.26M.

The following projects were approved for 2017.

▪ Kelso Fellowships: The success of this program, including case studies, employee ownership research and dissertations, etc. is due to the fact that this Rutgers University program penetrates academic institutions throughout the nation. Case studies, bios, and interviews with Kelso Fellows are available through links on the Foundation’s website to the Foundation for Enterprise Development (“FED”) and Rutgers University. In 2017 Kelso Fellows, both new Fellows, and some funding for prior Fellows to expand their initial work is proposed to be at $90K, $5K more than in the 2016 budget to accommodate the posting of “Requests for Applications” which were funded in 3rd quarter 2016.

▪ Edmunson Scholarships: In FY 2017, funding for the oldest EOF project, the Edmunson Scholarships is proposed to be $24K. Historically, the funding for the scholarships has been $24K for 12 scholarships; $2,000 per scholarship.

▪ January 2017 Mid-Year Kelso Symposium: This Workshop is underwritten by a $25K contribution to EOF by Menke & Associates that is a pass-through to Rutgers. EOF pays overhead for attending Kelso Fellows and not counting the Menke $25K pass-through, EOF should budget up to $50K. As with the Kelso Fellows, contribution for the 2017 Kelso Symposium has been made in third quarter 2016.

▪ General Social Survey (“GSS”): A $48,500 payment for one-fourth of the $182,000 required for employee stock ownership questions to be included in the 2018 quadrennial GSS is anticipated to be made. It is assumed that the year before the survey is done, the GSS will accept questions that are written not by EOF, but by professors at Rutgers, Drs. Joseph Blasi and Douglas Kruse. GSs personnel do at times alter the questions. Dr. Richard Freeman at Harvard University may also help with the development of the questions. The increase in cost of the GSS is due to an expansion of the questions on employee stock ownership. The GSS will cover the years 2017, 2018, 2019 and 2020.

▪ Beyster Symposium scheduled for June 2017: The Beyster Symposium will be held again in LaJolla, CA. In year 2016 $55K was budgeted for this Symposium. In 2017 EOF may budget less if FED contributes to the 2017 Beyster Symposium the same amount as in 2016. Dependent upon circumstances, EOF should budget $45K.

▪ Aspen Institute’s Center for Business Education: The Center, or “CBE” is a section of the famed Aspen Institute which hosts CasePlace.org which EOF helped fund through the FED. CBE will cease hosting the site in 2017. FED is negotiating with Aspen’s Center for Business Education for the site to be transferred, and expanded by the Rutgers’ School of Management and Labor Relations (“SMLR”). Per the attached proposal transfer of caseplace.org to Rutgers would be $14,140 to be shared with FED. EOF remitted $5K as its share per an agreement to partially fund FED’s payment to the Aspen Institute for the transfer of caseplace.org to Rutgers. For final transfer of caseplace.org $10K should be budgeted for 2017.

▪ EBRI Database Project: The purpose of this project is to develop account balance data on thousands of individual ESOP account balances. Based on the premise that the NCEO could obtain the “green light” to begin a major collection of data about individual account balances to provide EBRI, as is done for 401(k) accounts, EOF budgeted $60K since FY 15 for this project and the same amount should be budgeted for 2017. Again, the desired project for EBRI has not begun. Chair Lomele had discussions in 2016 with National Center for Employee Ownership (“NCEO”) Director Loren Rodgers as to its status, and he said the EBRI project has begun, but final completion depends on one TPA firm giving approval to a revised confidentiality agreement. In a conversation at year end, NCEO Executive Director Rodgers told President Keeling that another major TPA firm had withdrawn its support, wanting to ensure the confidentiality of its data. The future for this long delayed project is not bright. The plan was to fund the project through the NCEO as a “general” contractor.

▪ State Centers:
The NCEO may seek more funding for its State Centers program in 2017 which is at this time only the Pennsylvania Center.

▪ Contingency: This fund covers costs that unexpectedly arise such as unanticipated research and project opportunities. In 2017 the EC budgeted $24K for contingencies.

Examples of use of these funds are EOF being supportive of the University of Wisconsin work of John Hoffmire with Said Business School, Oxford University’s Conference on Business and Poverty. This program was conducted July 4 – 5, 2016 in Oxford, England, which has on its program agenda employee ownership. (See attached summary of the conference from John Hoffmire, faculty of Said and University of Wisconsin’s Center for Business and Poverty. Includes names of U.S. speakers prominent in the employee ownership field.) Once again, John Hoffmire has requested funding in the amount of $5K for this same program scheduled for July 10 – 17, 2017. He has invited EOF President Keeling to be a presenter. (See attached proposal referred to below under “New Projects”.) It was also decided at the November EC meeting that this project be a separate line item and no longer part of the Contingency line.

New Projects:

EOF has the possibility of having more for projects in FY 17 than specifically budgeted. There are currently three state centers not part of the NCEO: Vermont, Ohio, and one regional, Rocky Mountain. There are two NCEO centers: Pennsylvania, and the “virtual’ California Center.

As noted above in the Contingency discussion, John Hoffmire has requested funding in the amount of $5K for a program at Said Business School, Oxford University’s Conference on Business and Poverty scheduled for July 10 – 17, 2017. (See attached proposal.) It was also decided at the November EC meeting that this project be a separate line item and no longer part of the Contingency line.

Another project put forward was a big data visualization project submitted by the EO Almanac Team comprised of Vance K. Lopez and Damien G. Vira. It is a free web-based application that allows anyone to visualize and manipulate in real time a dataset with over 3 million rows and dozens of variables. The requested grant money of $21K was paid in 2016. At the November EC meeting this project was approved with the caveat that certain criteria be explained in a communication to Messrs. Lopez and Vira.


UPENN/CEO Project – Meetings’ Overhead: The CEO program, “Leading In An Ownership Setting”, was conducted July 10 – 15, 2016 and December 4 – 7, 2016. Revenue for the program was $143K with expenses in the amount of $115,317 having been paid out to date for the program.

Employee Owners’ Retreat (“EOR”): Marketing is done by both the Foundation “staff” – i.e. primarily Association staff, Dan Marcue, and the Ohio Employee Ownership Center, Kent State University, which provides the primary faculty for the retreat. The EOR attendance is capped at 50 persons, but recently average attendance has been 20 or even less. Registration fees cover the cost, and any net is shared with the Ohio Employee Ownership Center. Due to declining attendance over the past 5 or so years, as there is a perception, incorrect, that average pay employees can benefit just as much in becoming “owners” in style and practice from attending the successful Association Chapter meetings. It was again decided that only one EOR would be conducted in 2016. The 2015 retreat had 16 attendees. The EOR was conducted again August 10 – 12, 2016 in Downers Grove, Illinois having 15 attendees. EOF had revenue of $8,765 and expenses of $8,799 resulting in a loss of $33.

Increase in Operations Costs:

This is spending that has traditionally been budgeted to pay for the independent contractor dedicated to development, and overhead for national fundraising, letterhead, some IT overhead, and so on. The proposed $200K increase in FY17 is to pay for website redesign and/or upgrade, the communications and brand audits that focus on the Foundation, the Foundation’s letterhead, and expenses of meetings that a hotel may run through the Association. If there is a significant shortfall, reserves may be utilized.

EOF’s website, dataset, “looks”, or some call it brand, all date ten to fifteen years back at a time when EOF resources were negligible. The Strategic Plan 2015 emphasizes EOF being the prime Association entity for outreach to not only the ESOP community, but to the non-ESOP world, in order to increase employee ownership in America. Per the Strategic Plan 2015, a communications audit has been done. It made recommendations requiring significant modernization of EOF’s communications and image in today’s world of cyberspace and social media.

Steps are being taken as an outcome of the communications audit to upgrade all EOF communications – primarily the website. The issuing of RFPs to interested vendors will occur based upon the Brand Audit update. It was realized at the recent Board of Trustees’ meeting that upon completion of the Brand Audit if it was determined to change EOF’s logo, this should be accomplished prior to changing the website. Cost may vary with issues of “timing” and RFP responses, but the hope is that the redesign will not exceed $100K. A brand audit was commissioned in 2016, and the results of the brand audit may result in new initiations that will require increased operations spending. Hager Sharp was awarded the Brand Audit project. The Association, of course, will pay for the brand audit to the degree it recommends Association brand improvements. At this time a 50-50 split is anticipated.

Conclusion: Following is an approved FY 17 Budget for EOF.

Budget Details (.pdf)

1 Assuming $100K for website redesign, $50K for Brand Audit, and implementation in FY 17 of Brand Audit recommendations


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